Why "Health Care" Costs Are Rising
Increasing amounts of the dollars you spend for health care are paying for the lavish life styles of middlemen who don't provide any value to you, and in fact their profits stem from limiting the benefits which you receive. A 2009 survey of CEO's at managed care firms show the following totals, including salary, "bonus" and stock awards:
- Aetna: Ronald Williams $18,058,162.00
- Wellpoint: Angela Braley $13,108,198.00
- Cigna: H. Edward Hanway $18,818,467.00
- Health Net: Jay M. Gellert $ 3,643,342.00
- Humana: Michael McCallister $ 6,509,452.00
- Coventry Health Care: Dale Wolf $ 8,225,991.00
- Coventry Health Care: Allen Wise $17,427,789.00
- UnitedHealth Group: Stephen Hemsley $ 8,901,916.00 (In addition to $98.6 million from exercised stock options given to him in 1999)
Even the lowest paid of these CEO's make more money in one year than most primary care physicians earn in a 30 year career, with the others receiving the equivalent of 90 to 250 years of a doctor's earnings.
Of course, there are leagues of overpaid paper-shuffling mid-level executives who also parasitize your premiums, and their bloated salaries are too numerous to list.
For example, a California-wide survey of 118 nonprofit hospitals showed that base salary for CEOs averaged $514,000, according to Payers & Providers, a healthcare business publication. Add bonuses, retirement money, reimbursement for education costs, and expense accounts, and the average total compensation those CEOs raked in was $732,000.
A report from Sullivan, Cotter, and Associates lists 2008 average CEO pay to be $1.2 million at hospital systems with more than $1 billion in annual revenue. But some hospital executives get far more. For example, Jeffrey Romoff, CEO of the University of Pittsburgh Medical Center, pulled down $3.95 million for fiscal 2007, which was 19.7 percent more than he was paid the year before. Even this bloated salary was dwarfed by the incomes of the top executives at the Cleveland Clinic ($7.5 million) and Chicago’s Northwestern Memorial Hospital ($16.4 million).
In addition, the vast sums that are squandered by and on behalf of government bureaucrats to legislate, regulate, and administer the embarassingly decrepit military medical system, as well as the collective and centralized nightmare of medicare and medicaid, go largely unaccounted.
Add up all of the middleman expenses, and it is easy to understand how overall costs for a system of mediocre or poor quality can be so expensive.
Links to other sites that are tracking the vast wealth flowing to overcompensated "health care" executives:
Massive Profits Larceny: Great News for the Middlemen, Bad News for You
The "business" model of health care continues to reward the "managed care" industry at record levels. The September 4th, 2006 issue of American Medical News reports that for the 2nd quarter of 2006, revenues for United Health Group are up 57% above revenues for the second quarter of 2005, Aetna up 14%, Humana up 52%, Wellpoint up 27%. For the top five insurers, revenue for just the 2nd quarter was 47.8 billion dollars. That is a lot of money, and it buys a lot of influence.
It is no mystery how these vast sums are accumulated; premiums are increasing at two to three times the rate of inflation, and "reimbursement" to doctors, other providers, and hospitals is decreasing or denied.
Trillions of dollars that could be used to treat patients or pay for increasingly unaffordable prescriptions are diverted every year into the pockets of fat cats, lobbyists, and the political cronies of the "health care" industry, with amounts increasing every year.
Regardless of how you may feel about the medical-industrial complex boosting their already stupifying profits to record levels, it is clear that shifting money out of actual medical care neither benefits patients nor physicians, nurses, and other caregivers.